Friday February 7, 2014
Mayor Fischer cites cost savings as agencies
move toward One Water concept
Louisville Water Company and the Metropolitan Sewer District will immediately begin to share some services and employees to produce cost savings for customers, Mayor Greg Fischer announced today.
He accepted a recommendation from a team of Louisville Water and MSD leadership to bring together back-office services including procurement, fleet, human resources, customer service and information technology.
“Having two of everything just doesn’t make common or financial sense — our community learned that when we decided to merge the city and county,” Fischer said today during a joint meeting between the two boards. “This will lead to leaner, more efficient agencies and that will help both agencies reduce the size of future rate increases — ultimately saving customers money.”
Fischer made the announcement at the Ali Center, overlooking the Ohio River. “This river and its water are the reasons our city was founded more than 200 years ago — and it is the source of a new vision for our community’s water system to be known as One Water,” he said.
Fischer asked both boards to approve sending a Comprehensive Interlocal Agreement that would allow the combination of services to Attorney General Jack Conway for his approval. Fischer also asked the two boards to continue the legal work and due diligence that would result in a possible total consolidation of the two agencies.
“There are numerous ways this could happen, including a new holding company in Metro Government with two branches, the Board of Water Works and MSD. Those details need much more thorough work -- and County Attorney Michael O’Connell will direct that effort,” he said.
The announcement today was the culmination of a nearly three-year process, which began in 2011 when then-State Auditor Crit Luallen released her comprehensive review of MSD, identifying many troubling issues within the agency.
That led to significant changes at MSD -- and the Mayor also laid out a new vision for the city’s water system called One Water, in which MSD and Louisville Water would more closely collaborate and potentially consolidate.
A team of senior leadership at Louisville Water and MSD and their consultants have been doing the due diligence work since early 2013 toward that effort. In addition, Mayor Fischer hired a separate, independent consultant to review the due diligence work of both boards.
“I wanted a completely separate peer review to ensure that I was getting information from all angles,” Fischer said. “This gave another set of eyes -- and opinions -- that were valuable to me as I worked with both agencies to set a new vision for the future.”
That report, completed by the Huron Consulting Group, affirmed that more services should be shared between the two agencies and that there was a solid foundation for a consolidation. It also suggested that the agencies could be privatized, but Mayor Fischer rejected that idea for now. However, he left open that option in case the situation changes in the future.
“We have a good quality workforce now and solid leadership in place at both agencies. There is no need to consider changing that at this time as long as that dedication to quality, continuous improvement and best-in-class continues,” Fischer said.
Louisville Water President Jim Brammell and MSD Executive Director Greg Heitzman said they support the Mayor’s vision -- as did their board chairs.
“Our customers expect a high-quality, safe supply of drinking water,” Brammell said. “Moving forward with this One Water concept allows us to continue with that excellent quality and service while working with MSD to achieve savings.”
“One Water will transform water and wastewater service delivery for our community,” Heitzman said. “Partnerships with Louisville Water will ensure that we continue to protect the public health and safety of our community, all the while meeting our regulatory obligations for clean water.”
The chairs of the two boards also said they supported the Mayor’s direction.
“Louisville Water and MSD have carefully considered how to best serve this community for years to come,” said Marita Willis, Chair of the Board of Water Works. “Both Louisville Water and MSD provide a critical service to the community. Working more closely together will allow for reduced rate increases in the future while continuing to improve the product we offer.”
“This proposal will result in a cooperative plan of action that will not only reduce expenditures by MSD, but also lessen the burden on our ratepayers,” said MSD board chair James Craig “It will also provide a higher level of customer service through greater efficiencies and the shared knowledge of both our organizations.”